As an organization grows in complexity and size, more processes are involved, and more management functions are needed to make sure they are being performed properly:
If the organization above has a surviving identity, or being capable of independent existence, we can assume that this organization is a Viable System.
However, it is worth mentioning that this independence is not absolute; since no living being is absolutely independent. Therefore, independence is a very subtle and sophisticated notion and has been used here with some degree of tolerance and leniency.
Each management process is dealing with its own horizontal variety in its own process, and there is nothing to ensure that whatever one of them does is coherent with what the other is doing.
As an example, if the Financial Manager maximizes his efficiency by reducing the total number of items being held in the inventory to near zero, this limits the ability of the Sales Manager to maximize their objective by selling items to every customer as soon as they ask for it and not making them wait for the items to get produced and delivered in due course.
Should these multiple lines of management-process-environment act as an integrated organization, this means someone should be there to manage the vertical variety between these multiple management functions.
Horizontal managers need their ‘autonomy’ to exercise their requisite variety in order to effectively deal with the exceeding variety of their processes; however, it comes to mind that we might need a ‘System 2’ to, in turn, control the variety vertically.
If the ‘System 2’ creates some rules to ensure the cohesion of the whole system, it will, eventually, reduce the variety for horizontal management processes. Every rule will create boundaries, a set of Do’s and Don’ts which will interfere with the autonomy of the horizontal management processes; and therefore, impeding their ability to deal with their own variety.
These horizontal managers need their maximum possible autonomy to be able to handle the ever-increasing variety of their complex processes in related environments. And yet, by introducing the ‘System 2’, we have effectively reduced this autonomy that they need immensely!
If the variety is reduced too much, the horizontal managers will lose their ability to effectively manage their own processes; and if it is reduced not enough, the cohesion of the whole organization will be at risk.
The System 2 provides a ‘service’ to make sure the cohesion is preserved and the activities are aligned to each other.
System 2 exists to coordinate activities in System 1, manage conflicts between System 1 elements, and implement decisions regarding common resources, services, and information.